tn SPECIVKC SUMIBDNETION mw = a,” she Comers Chase from saerting juritiction over 2 Kansas allroad 0 « wait bem vii by « Kanaan corporation for damages renting from the kan (A tie siyped frcmn one yoaes in Kansan to anether, Since the prnertial 7 lvurden on \oterstate commerce ix a {actor that can be considered under the pe rar egal tnt, hamever, Commerce Clause dyctions to jardin sre rare Ye see Verdin Aut ¥. Midwescn Fa ~ 406 bre ndin Autohite Cory. v. Midweson Enterprises, Ine. mci 1 221, 100 L.8A.24 06 (1968) (Ohio law permanently wlling the state's statute of limitations aa wo loreign corporations that do nck consent 10 the weneral juridietion A the Ohia aura viclates the Commerce Clause) BURGER KING CORP. v. RUDZEWICZ ‘eprom Coan of the Unit State 1985 470 UB 400, 05 804 7174, 6 1.424 808 (Burger Kir Miami. Franchi ing is a Florida corporation whose principal offices are in sees are licensed to use its trademarks and service marks in leaed standardized restaurant facilities for a period of twenty years. The firerning contracts provide that the franchise relationship is established in Miami and governed by Florida law, and call for payment of all required hy foes and forwarding of all relevant notices to the Miami headquar- ters ‘The Miami headquarters sets policy and works directly with the franchi- sttempting to resolve major problems. Day-to-day monitoring of franchisees, however, is conducted through district offices that in turn report to the Miami headquarters. John Rudzewicz is a Michigan resident who, along with another Michigan resident (Brian MacShara), entered into a twenty-year fontract with Burger King to operate a restaurant in Michigan. when the restaurant's patronage declined, the franchisees fell ‘monthly payments Burger King then brought a diversity District Court in Florida, alleging that the franchisees had obligations and requesting damages and inyunctive claimeet that, because they were Michigan residents King’s claus did oot “arise” within Florida, the District jurisdiction over them But the court held that the puruant to Florida's long- jurisdiction to any person, ECnl Providing its residents with a convenie™ ed by out-of-state actors * * * Moraes derive benefit” from their interstate allow them to escape having {0 acondh arise proximately from sh ed to avoid interstate obligation” readily be wielded as a territorial tage “modern. trang hay ‘have been voluntarily assumed. Jess burdensome for a party." ® communications have made it much les ve ite defend himself in a Slate whee eo origin ancl ay will not be unfair to subject hi tthe burdens Saanatiea TET fry for disputes relating to such activity. M Uren Cate Notwithstanding these considerations, the constitutional touchy, taled “nant Mr, mains whether the defendant pars that fo cota in the forum State, * * * Although it “ent to establish ity " ould be sufficient to such causing injury in another State s ire, the Court has consistent there when poiey considerations so require, he CAN ie Eonaotently bly that this kind of foreseeability is not a “sufficient Me co teiing Personal juriadiction, ** * Instead, “the foreseeability that is critica) ty 4. salves" * i that the defendant's conduct and connection wii, process analysis * * * is that ticipate bei the forum State are such that he should reasonably anticipate being haled in, court there.”** * This “ ful availment” requirement ensures that a defendant Jot be baled inte a uration solely a a rest of “random,” “ortuitgy “altenated" contacts, ** * or ofthe “unilateral activity of anther pry third peraon'"* * *, Jurisdition is proper, however, where the contags Proximately result from actions by the defendant himself that create « “substantial connection” with the forum State. * * * Thus where the defer dant “deliberately” has engaged in significant atvities within a State, or has ereated “continuing obligations” between himself and residents of thy forum, * * * he manifestly has availed himself of the privilege of cond business there, and because his activities are shielded by “the benefits ant protections” of the forum's laws it is presumptively not rs require him to submit to the burdens of litigation in that forum as wel, «» » Once it has boen decided that a defendant purposefully established ‘minimum contacts within the forum Stat, these contacts may be considene| in light of other factors to determine whether the assertion of person jurisdiction would comport with “fair play and substantial justce™* ++ ‘Thus courts in “appropriate case(s!" may evaluate “the burden on the defendant,” “the forum State's interest in adjudicating the dispute,” “th plaintiff's interest in obtaining eonvenient and effective relief” “the inter ‘tate judicial system's interest in obtaining the most efficient resolution of controversies," and the “shared interest of the several States in furthering fundamental substantive social poi siderations some times serve to establish the reasonableness of jurisdiction upon a leer showing of minimum contacts than would otherwise be required. ** * Os the other hand, where a defendant who purposefully has directed his acivitie at forum residents seeks to defeat juristition, he must present a eompaling case thatthe presence of some other considerations would render jursfictioe unreasonable, Most such considerations usually may be ‘acc— SPECIFIC sURIspictION "RISDICTION _ dhrough means short of fi potential clash of the forum’s policies ee State may be accommodated th ference may seek nae: Silat, a defendant cama Side the lange of venue, Nevertheless, fae arereue aa concent of “far pny aa erties minimum requirements reasonableness of jurisdiction even if the dines & prin wiiisaueen 1¢ defendant hi may not be employed in such a wan sasbrivenient! 8 way as to make litigation “ rave a nar te hie grt, Party unfainly is at a “overs Gene eat comparison to his opponent, * ** tthe teling B aw Applying these principles to the tial record evidence su a analysis. If the question is whether an indigeival no slate party alone can automaticaly establish slicers ene ose the other party's home forum, we believe the answer clearly is that it cannot, ‘The Court long ago rejected the notion that personal jurisdiction might turn ‘on “mechanical” tests, or on “conceptualistic * * * theories of the place of contracting or of performance” * * *, Instead, we have emphasized the need for a “highly realistic” approach that Tecognizes that a “contract” is “ordi- narily but an intermediate step serving to tie up prior business negotiations with future consequences which themselves are the real object of the business transaction.” * * * It is these factors—prior negotiations and contemplated future consequences, along with the terms of the contract and the parties’ actual course of dealing—that must be evaluated in determining whether the defendant purposefully established minimum contacts within the forum. In this case, no physical ties to Florida can be attributed to Rudzewicz other than MacShara’s brief training course in Miami Rudzewicz did not ‘maintain offices in Florida and, for all that appears from the record, has never ‘even visited there. Yet this franchise dispute grew directly out of “a contract which had @ substantial connection with that State.” McGee v. International Life [nnirangelGo,/*.* *. Eschewing the option of operating an independent ‘22, ‘The Eleventh Cireult held that MacSh aras prosence in Florida seas irelevant to the ‘question. of Rudzewier's minimum contacts ih tht forum, eon hat aden And’ MacShara never a ‘tnd “signed the agreements in thelr individ Capacities” *° The two di jointly form a fcrporation Uhrough which they were seeking to conduct te franchise, however. ** * Thay were required to decide which one of them ‘rool! travel to Florida to saiay the taining Fequirements so that they ould commence Trsiness, and ‘Rudaewiez participated in the dcision that MacShara would go here. We Ihave previously towed that when commercial activites are “cari on in ebalf of an out he is a “primary participant)” ‘rine and has acted parpesefully in directing howe activities * * Because MacShara's ma- triculation at Burger King University i not ‘pivotal to the disposition ofthis cao, we need tot resolve the permisible bounds of sich attribution4 _gurispicTioN OVER” Aled out beyond” Mic retpe purchase of & long sn rately * local enterprise, Rudzewice deliberately nogotinted with a Florida corporation fF Give from affiliation Si chise and the manifold benefits that Spero he entered into teat q lonwide «6 © Upor wuing se Sa toa ee ay contacts with Burger King in ea regulation of his busing : jer a0 ° Borer ig Mn olathe“ 2 eg on in mone " ship to the company in Florida can it oo make them “fortuitous,” or “attenuated. Rudzewit tinued we of Bu Contras. tly reer penta Miami ad Hi coined eof Brg trademarks and confidential business in! in Florida. For these i caused foresee juris 1 the cxrporaton in OR, Mt thee reat was, atthe very least, presumptively feasonah!® called ig fecount hee foreach ih er that in ight ofthe spay ‘The Court of Appeals concluded, aie isi cna rt A ue ae Bing Ne Rudzowiee reasonably believed that “the Michigan office was forall nya and amon of Burger King” and that e therefore yg Sea Age Bug King suit ouside of Michigan "sn reasoning overlooks substantial record evidence indicating that Ru¢ thost certainly knew that he was affiliating himself with an enterprise primarily in Florida, The contract documents themselves emphasize jut Burger King’s operations are conducted and supervised from the 4 headquarters, that all relevant notices and payments must: be sent ‘there, ang that the agreements were made in and enforced from Miami * Me the parties’ actual course of dealing repeatedly confirmed that decisic ‘authority was vested in the Miami headquarters and that the district offee sorved largely as an intermediate link between the headquarters and ihe franchisees. When problems arose over building design, site development fy, rent computation, and the defaulted payments, Rudzewice and MacShary Jearned that the Michigan office was powerless to resolve their disputes and could only channel their communications to Miami. Throughout these dis putes, the Miami headquarters and the Michigan franchisees carried on continuous course of direct communications by mail and by telephone, and it ‘was the Miami headquarters that made the key negotiating decisions out of ‘which the instant litigation arose. Moreover, we believe the Court of Appeals gave insufficient weight to provisions in'the various franchise documents providing that all disputes would be governed by Florida law. The franchise agreement, for example, stated: ‘This Agreement shall become valid when executed and accepted, at Miami, Florida, it shall be deemed made and entered i of Florida and shall be governed and construed under with the laws of the State of Florida. The choice of not require that all suits concerning this Agree * The Court of Appeals reasoned that choice- the question of personal jurisdiction, relyi ition that ‘the center of gravity fornecessarily confer the soverei reasoning misperceives the j Honson and subsequent cas which focuses on all clement defendant's conduct—is d in Prerogative to assert jurisdiction.""* * * This vor of the gud proposton "The Court in ; ot nai that choice-of-law analysis— © transaction, and not simply on the Pare fom minimum-contacts jurisdictional analy- ction to shold solely on the defendant's connec (0 the forum. Neng in our ca, hoes erst Ci ne at ould be inored in conering wre te as nay “purowfly invoked the beets and tein ee ane jurisdictional purposes. Although such a provision st insufficient to confer jurisdiction, we belive that, whey js would be 30-year interdependent relations when combined with the which focuses at the 2 Nor has Rudzewicz pointed to other factors that can be said perstasivel to outweigh the considerations dscused above and to eatalah the nner, tutionality of Florida’s assertion of jurisdiction. We cannot conclude that Florida had no “legitimate interest in holding [Rudzewiez} answerable on a claim related to” the contacts he had established in that Stato, [See] McGee v. International Life Insurance Co. * * * (noting that State frequently will have a “manifest interest in providing effective means of redress for its resi- dents”) Moreover, although Rudzewicz has argued at some length that Michigan's Franchise Investment Law * * * governs many aspects of this franchise relationship, he has not demonstrated how Michigan's acknowl edged interest might possibly render jurisdiction in Florida unconstitutional.” Finally, the Court of Appeals’ assertion that, the Florida litigation “severely impaired [Rudzewiez’s] ability to call Michigan witnesses who might be essential to his defense and counterclaim” * * * is wholly without support in the record. And even to the extent that it is inconvenient for a party who has ‘minimum contaets with a forum to litigate there, such considerations most frequently can be accommodated through a change of venue. * * * Although the Court has suggested that inconvenience may at, some point become 50 substantial as to achieve constitutional magnitude, McGee v. International Life Insurance Co., * * * this is not such case, zr 25. Complaining that “when Burger King is the plaintiff, you won't ‘have it your way. bro ts al ach Mim Ridzewice contends that interest in providing e convenient forum is negligible giv fn the company's size and ability to conduct Tigation anywhere in the country. We dis. agree, Absent compelling considerations, cf Meteo v. International Life Insurance Co. 1984 defendant who has purposely de- rived commercial benefit from his afiiaions ina forum may not defeat jurisdiction there simply because of his adversary’s greater net veal, 26, Ruslzewicz has failed to show how the ‘District Court's exercise of jurisdiction in this: aus might have ren ata inonsstent with ‘Mihir eters ** Tn any event i trumvcniate angi prnippos that tro oF more States nny be need inthe cateome dit ad he en ores til contingents stan ae ‘ean usually be uccommo- tule rather than of juraicion in16 jude, however that the partog g ning power” and “ey involved a characteristic dsp” OT oice” of the poten surprise,” and that Rudzewicz “che provisions suggesting! it i their lengthy printed litigation in Florida because {0 ens in a cma contrary were merely “boilerplate decor eyments to the Distree * © * Rudzowice presen ted many of HH OF misrepresentation, fry contending that Burger King ig was os dealings with him; ang duress; that it gave insufficient notion 10st bench ti th egrkract was one of adheing had ade no mistenrencn ons that Rugg fran nor ween ae dare da icz and Ma ‘wer ‘ge(t] under eco! is vay reine teat “edngs of fat shall not ee reintad, ous,” and neither Rudzowicr nor the Court of APDSA TT ibid to reg evidence that would support “definite and frm Dis Court's findings are mistaken. * * ‘The Court of Appeals also cone’ rh I the Court of Appeals appare Notwithstanding these considerations, oe an eae ata ty believed that it was necessary to bso ia ie mean ning that an alfir 2 ould seul the etree of juidction ove cutfstate consumer i collect payments due on modest personal purchases” and would “soy the jing smaller debts.” * *'s seeds of default judgments against franchisees owing sm : — share the Court of Appeals broader concerns and therefore reject any tie manic jurisdictional formulas; “the facts of each case must [always jy weighed” in determining whether personal jurisdiction would eomport “fair play and substantial justice”* * * The “quality and nature” of gq interstate transaction may sometimes be so “random,” “fortuitous,” or “q, temuated” that it cannot fairly be said that the potential defendant “shoutg reasonably anticipate being haled into court” in another jurisdiction, * + + We also have emphasized that jurisdiction may not be grounded on a contract whose terms have been obtained through “fraud, undue influence, or over ‘weening bargaining power" and whose application would render litigation "yy sravely difficult and inconvenient that [a party] will for all practical be deprived of his day in court” ** Just as the Due Protess Clause aloes Aexibility in ensuring that commercial actors are not effectively “judgment proof” for the consequences of obligations they voluntarily assume in other States, McGee v. International Life Insurance Co., * * * so too does it prevent rrules that would unfairly enable them to obtain default judgments against unwitting eustomers. * * * For the reasons set forth above, however, these dangers are not in the instant case, Because Rudzewiez established a substantial and, ing relationship with Burger King’s Miami headquarters, rece from the contract documents and the course of dealing subject to suit in Florida, and has failed to demonstrate that forum would otherwise be fundamentally unfair, ict Court's exercise of jurisdiction * * * did not> : Se SPECIFIC JURISDICTION 17 Florida. busin boilerplate language contained in various dacuments * * * sstabli respondent "purposely availed hime ofthe bens ae os z : Such superficial analysis creates a potential for unfair- pempritcit See anenicor aa their franchisees but, time to time in such relationships, ae ar near ares Bom Judge Vanee's opinion for the Court of Appeals for the Eleventh Circuit adequately explains why I would affirm the judgment of that court. I particu- larly find the following more persuasive than what this Court has written today Nothing in the course of negotiations gave Rudzewicz reason to anticipate a Burger King suit outside of Michigan. The only face-to-face or even oral contact Rudzewiez had with Burger King throughout months of protracted negotiations was with representatives of the Michigan office, Burger King had the Michigan office interview Rudzewica and ‘MacShara, appraise their application, discuss price terms, recommend the site which the defendants finally agreed to, and attend the final closing ceremony. There is no evidence that Rudzewiez ever negotiated with anyone in Miami or even sent mail there during negotiations. He main- tained no staff in the state of Florida, and as far as the record reveals, he has never even visited the state, if ‘The contracts contemplated the startup of a local Michigan restau- rant whose profits would derive solely from food sales made to customers in Drayton Plains, ‘The sale, which involved the use of an intangible trademark in Michigan and occupancy of a Burger King facility there, required no performance in the state of Florida, Under the contract, the local Michigan district office was responsible for providing all of the services due Rudzewicz, including advertising and management consulta- tion, Supervision, moreover, emanated from that office alone. ‘To Rudzew- icz, the Michigan office was for all intents and purposes the embodiment of Burger King. He had reason to believe that his working relationship118 OR PROPERTY JURISDICTION OVER PARTIES th Burger King began and ended in Michigan, not ab the distany aay with Burger . Florida headquarters. °° * aren that the office in Rudzewiw home state conducted go 3 1, we believe that supervised the contract, he negotiations and wholly Seg of the supervisory office would fe A reason to assume that t he 4 : wuld file suit. Rudzewicz Ja same state in which Burger King quater ‘ghich Tamalata ita i stant corporate he! late direct dings ‘waa him wold ltr seek ta assert urseton of 8 in the courts ofits own home stale. o ; Just as Rudzewicz lacked notice of the rere a in Flrde he was financially unprepared to meet its at aa rE le fre relationship in particular i fraught with potential fr financial sy The device of the franchise gives local retailers the access to nati trademark recognition which enables them to compete with betiong, hanced, more efficient chain stores. This national affiliation, howe, does not alter the fact that the typical franchise store is a local concen, serving at best a neighborhood or community. Neither the revenues of ¢ local business nor the geographical range of its market prepares average franchise owner for the cost of distant litigation. * * * ‘The particular distribution of bargaining power in’ relationship further impairs the franchisee’s financial pre franchise contract, “the franchisor normally oceu se role” hharacteristie disparity of bangai of this case. There is no indication that Rudzewiez had any negotiate a reduced rent or franchise fee in exchange for the added ri suit in Florida, He signed a standard form contract whose terms non-negotiable and which appeared in some respects to vary from the more favorable terms agreed to in earlier discussions, In fact, the final contract required a minimum monthly rent computed on a base far in excess of that discussed in oral negotiations. Burger King resisted price concessions, only to sue Rudzewicz far from home. In doing so, it severely impaired his ability to call Michigan witnesses who might be essential to his defense and counterclaim. Notes and Questions